FREE Insurance Networking eNewsletters 
Carriers Confront the Changing Face of Storage
Insurance Networking News, August 1, 2008
When German armored columns unexpectedly smashed into Allied lines during The Battle of the Bulge on Dec. 16, 1944, many American cooks and clerks—long accustomed to the relative safety of the rear—found themselves hastily pressed into front line duty. In a similar, albeit less dire manner, the storage backbones of insurers—long thought of as a purely back office function—are now being tasked with many functions few would have envisioned years ago.
There are many reasons for this shift in the way data is warehoused and managed. One obvious reason is that the sheer volume of data insurers must now keep is forcing them to assess their strategies to store it. Insurers are storing increasing volumes of auditing and usage data, notes Jeff Goldberg, a senior analyst at Boston-based Celent. In addition to these and traditional policy and claim data, carriers must store other types of data.
Advertisement
“It’s a steady increase on two fronts,” says Craig Lowenthal, EVP & CIO of New York-based NYMAGIC Inc., which as a specialty lines company, doesn’t see the level of policy volume as do other carriers, but is noticing an uptrend in storage needs nonetheless. “One is from the imaging side, we image everything and document imaging takes up more space than standard data. Also, e-mails keep coming and the attachments keep getting bigger.”
Craig Lowenthal
Another reason is the increasing demand from regulators, rating agencies and lawyers for access to a carrier’s data. With enterprise risk management becoming a greater priority for carriers, even areas such as archiving and business continuity are meriting more attention. “The trend is toward more regulation and compliance, which is resulting in more non-discretionary spending on storage-related technologies,” says Rockwell Bonecutter, managing partner, North America data center technologies and operations, for Bermuda-based Accenture LLC.
Fortunately for CIOs spending that money, steady advances in technology have given them broader options when it comes to enterprise storage. Servers based on multi-core processors from Intel and AMD, along with advances in virtualization, now allow companies to to run multiple virtual machines on a single server. Moreover, vendors are increasingly bundling storage with other functionality such as enhanced security and analytic capabilities.
VIRTUAL STORAGE
NYMAGIC’s Lowenthal was eager to avail himself of these new technologies when he joined the company in April of 2007. “When I started here, our server farm and storage was out of control,” he says. To remedy this, Lowenthal purchased virtualization software from Palo Alto, Calif.-based VMware Inc. and paired it with a storage area network system from Eden Prairie, Minn.-based Compellent Technologies Inc. in order to virtualize both servers and storage. “We get great functional capability out of this platform,” he says. “Not only can we quickly respond to the demands of our business and developers, we can more efficiently and cost effectively manage our data center.”
NYMAGIC currently has a production system that consists of three dual quad-core servers that house about 18 virtual servers. They also have a QA and development platform that consists of 12 virtual servers housed on one physical server. Lowenthal says that he is currently in the process of acquiring two more VMware-based physical servers—one for QA and development and another for disaster recovery.
According to Lowenthal, one of the primary benefits of using virtualized servers for storage is that they give system administrators a great deal of flexibility when it comes to allocating storage. “It’s certainly the way to go because you can parse out whatever storage you need to the virtual servers,” he says. “Before [virtualization] you would max out a server but still have extra disk space somewhere else. Now you have one centrally located place to manage your storage.”
While the ability of virtualization to increase server utilization is well known, another often overlooked advantage is speed. “Where it used to take a few weeks to implement a new server, we can now do it in less than day,” he says. “It’s made our development team happy because they get quick turn around on a server and don’t have to wait as long.”
RATIONALIZATION
Yet, presently, insurers taking full advantage of virtualization may be more the exception than the rule, claims Bonecutter. “The uptake of storage virtualization is pretty slow within the insurance sector, but it’s starting to get more of a foothold.” he says. “It’s still viewed as an emerging technology. You see more of it on the server side; I just think it’s taking a bit longer on the storage side.”
What’s more, Bonecutter says, for all of the promises of major savings made by virtualization proponents, he has yet to see much evidence of it removing operational cost from balance sheets. “All that it’s done is provide more flexibility, but it has added complexity,” he says. “You’re lucky if it’s been neutral from a cost perspective.”
Bonecutter says carriers must re-architect tangled legacy environments to reap the full benefits of implementing new storage technologies. “That’s when you start making substantive, meaningful changes to the storage environment,” he says. “It has a longer-term payoff then just going in and adding another storage array that’s more energy efficient or one that utilizes virtualization. It’s really about what you are going to do with that data and how you’re managing that data.”
For more information on related topics, visit the following channels:
